Risky research projects are, other things being equal, intrinsically harder to monitor than those which are less risky. It is shown using agency theory that a standard cost benefit project analysis which ignores the agency problem will introduce a bias towards excessively risky projects.

A continuous time dynamic price and quantity game is analysed between the seller and the consumer of an addictive substance. Consumption dynamics are modelled using a Becker Murphy rational addiction model. Conditional on the buyer's consumption strategy, a monopoly seller manipulates the price...

Tax compliance is modelled as a Bayesian Nash equilibrium in a costly state verification game with imperfect auditing. Neither the tax payer nor the auditor can measure the tax payer's true liability precisely: they observe independent noisy signals.

In an ongoing organization, such as a large law parternship firm, employees are motivated not only by current rewards but also by the prospect of promotion, and the opportunity to influence policy and make the rules in the future. This leads to a dynamic programming problem in contract design....

Risky research projects are, other things being equal, intrinsically harder to monitor than those which are less risky. It is shown, using agency theory that a standard cost benefit analysis which ignores the agency problem will introduce a bias towards excessively risky projects.

Risk aversion and limited liability can result in a rational to gambling. An addictive episode may be triggered by a loss and it may be terminated by a win. The gambler rationality chases a target level of wealth, while being drawn ever more strongly into a gambler's ruin.

The consumption of cigarette and tobacco products in Australia is modelled using the rational addiction theory of Becker and Murphy. The model incorporates information on advertising by cigarette and tobacco producers and by anti-smoking organisations, measures of anti-smoking policies such as...

We model career design as a recursive contract design problem in an overlapping generations firm. Agents live two periods. In period 1 they may be hired as employees, paid a wage, and produce output. In period 2 they may be promoted to become joint owners (partners) of the firm, producing no...